In point 1, why does trading of crypto incur a taxable event? If I buy a Picasso for $20 million and then later trade it to a friend for a Van Gogh which is worth $40 million, is that taxable?
I had this problem in 2018 - I bought BTC in 2017 before the boom, exchanged a bunch for ETH at the peak of 2018, and then rode the ETH all the way back down. I had to pay a bunch of taxes on the BTC gains I “realised” even though I didn’t get any actual cash out. I had to pick a price settle for BTC/USD on the day I bought ETH.